I'm the Detroit bureau chief for Forbes, which means I spend most of my time covering the automotive industry. But I also keep an eye on the rest of America's heartland—where stuff is manufactured and grown. I've been on the auto beat for more than 20 years at Forbes, Business Week and the Detroit Free Press. At the Boston Globe, I rode the tech bubble for a while, but I found there's nothing quite as fun as the auto beat. Whether you drive a car or not, everyone has an opinion about cars or car companies. What's yours?

Will Google Kill The Auto Industry? No, And Here's Why.

I’m amused, and mildly irritated, by all the credit Google gets for the advent of driverless cars, as if autonomous driving were an invention that America’s hapless automakers could never have envisioned.

In fact, the auto industry has been developing self-driving vehicles for decades, long before Google even existed, when Sergey Brin and Larry Page were just babies.

But there’s a growing consensus, mostly emanating from the left coast, that Google has somehow cracked the code to the future of mobility and will soon render traditional carmakers like General Motors, Ford Motor and Toyota Motor as nothing more than purveyors of ordinary appliances.

Baloney, I say. Self-driving cars are coming, but they won’t have a Google badge glued to the hood.

And while it’s exciting to think about all the possibilities of a futuristic world full of robotic cars providing safe, clean mobility for all, don’t count on that Jetsons vision in your lifetime. There are still too many regulatory, technological and practical obstacles in the way.

Instead, look for the technology to roll out gradually, building on systems that are already available, like adaptive cruise control, active braking, lane-keeping systems and parking assist.

The 2014 Mercedes-Benz S-Class, due out in September, will be the first car on the market fully capable of driving itself (under certain circumstances; see video below). Its new steering assist feature will keep you in your lane up to 124 miles per hour, but you have to make turns manually. In stop-and-go traffic, the array of sensors and cameras keeps an eye on cars around you, knowing when to accelerate and when to brake. But you still have to remain alert, and you must keep your hands on the wheel at all times, or the system will shut off.

He’s right about the potential fallout. If cars are smart enough to drive themselves, and avoid crashes, everything from the steel industry to hospitals would be affected. But I agree with Forbes contributor Haydn Shaughnessy that a $2 trillion market in the U.S. seems overblown. And I think Mui is perhaps getting swept up in the what-ifs of driverless cars. (He’s an innovation consultant, after all.) Still, I commend him for diving into a sexy topic with thoughtful analysis.

An auto writer I respect a lot, Wards.com columnist Drew Winter, argues in a recent blog post that Google poses a serious threat to the auto industry. He says the tech giant and automakers are beginning to wage “an epic battle for the soul of the auto industry.” I don’t think so.

Instead of Google vs. Detroit, I see a new era of collaboration. Carmakers will necessarily team up with digital partners like Google, Microsoft, Intel (maybe even Apple) to produce talking vehicles that don’t crash and get you to work on time. Companies like Ford and Microsoft already collaborate on technology that lets you bring your music and social media apps into your vehicle. Now these non-traditional partners will be working together to solve the difficult challenges of urban mobility on an overcrowded planet.

GM’s Chief Technology Officer Jon Lauckner is already plotting a new approach to innovation that includes collaboration on autonomous driving. Many of the best ideas for cars of the future, he told me in a recent interview, won’t come from car companies at all, but rather from non-traditional auto suppliers, like Microsoft or Google, and from innovative start-ups. “We no longer rely solely on our in-house expertise, which is a big change from where we’ve been in the past,” he said.

But like GM, Google doesn’t have all the answers either. It isn’t capable of producing self-driving cars on its own. It will need the auto industry’s expertise to turn its vision into reality.

One thing the tech and auto industries can agree on is that self-driving cars are doable. “This is not Star Wars technology,” says Renault-Nissan chief executive Carlos Ghosn. With enough sensors, processors and cameras on board, any car can drive itself. But at what cost? The radar system mounted to the top of Google’s self-driving Toyota Prius costs an estimated $70,000. Like Google, many carmakers already have prototypes on the road. The debatable question is when they’ll get to market, and under what circumstances.

In August, the U.S. Department of Transportation launched the first real-world test of connected vehicle technology — critical for self-driving cars to operate safely — in and around Ann Arbor, Mich. One goal of the year-long project, involving 3,000 vehicles, is to come up with a realistic time frame for the technology.

Honda Motor Co. President Takanobu Ito agrees. “We have the hardware to make self-driving cars. But we feel the driver has to be ultimately responsible. We want technology that assists the driver, like when he is fatigued.”

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I agree Chunka Mui’s numbers exhibit some irrational exuberance, but exuberance is a commodity we could use more of in automotive. The industry has been beaten down so badly in recent years it seems almost impossible to dream really big dreams, but they are really good at it out on the left coast.

It’s easy to make the argument that autonomous cars have a long, long development path ahead, especially for those of us who live in the auto industry. After all, autonomous features are basically options that bring in incremental revenue. But to tech companies, autonomous vehicles represent huge new markets. That represents a different business model and different metrics. Google has the money and resources to collaborate with auto makers at the same time it develops a means of directly competing. I think Google could become the biggest foe auto makers have ever faced.

I have a brother-in-law who used to say “Don’t fear the Communists. Fear Disney!” Maybe now he should say, “Fear Google!”

Seriously, though, I agree that Google folks and others in the tech industry are really good at thinking about where society is headed and what we need next. It comes down to the issue of personal mobility. How can we make sure it is safe, efficient, economical and accessible to everyone?

Google will surely push the automakers in a way they’ve never been pushed before. But I think they’re in the mobility business for the long haul.

The thing that is changing the auto industry the most is something that many of us may have learned from those classic Disney movies, and it is the power of the sword of truth. It is not easy to be evil any more and stay hidden. As far as “changing” the auto industry, Silicone Valley has been at this for well over a decade. The post submitted above who mentions having their car auto drive to the Jifffy Lube needs to come out of their cave. With quotes in this article from Carlos Ghosen it is now not hard to imagine the cars of the future that will not have oil in their engines. The transition from a dinosaur economy that has been dumping millions into gas,oil, spark plugs, and the like of oxygen sensors is on to one that will be purchasing electric car battery upgrades, software, video sensors, and likely more tires. Why more tires you might ask? Because when people can see the cost per mile of vehicle operation drop to one tenth or more of what it has been with the the gas pump and auto repair shop economy, the new EV economy is going to take off like a rocket. Electric car drivers enjoy new disposable income that the oil and auto industries continue to bleed out of the middle and low income population. The top 1% are now at the front of the line feeding the new electric vehicle economy. This month marks American history where there are now two car factories with six sigma robots cranking out the production of electric autos. Fasten your seat belts. When the used electric automobiles begin to enter the used car market the true open marketplace of Joe consumer takes the wheel and he will be steering quite a different course.

It really doesn’t matter who came up with the idea first. The first one to market with a product that is cost effective, has brand recognition and has tech that just works, is going to be the winner.

The thing that Google has to their advantage is that they have the data and they have the fortune to undertake things just for the heck of it. They have projects because they’re cool. They ask the question “What if?”. US auto makers are starting to do this also, but that is after a massive bailout and a lack of innovation for decades.

Is everyone going to have these cars? No. Can I see these cars in the form of Taxi cabs in San Francisco and San Jose? Yes, absolutely. While Google might be straying from their unofficial mantra of “Do No Evil” they still do a lot of cool things that benefit everyone, privacy concerns aside.

I have a sports car that I tremendously enjoy throwing into turns and shifting gears on. I want to continue driving that. However, when I drive down from Sacramento to LA in the middle of the night it would be awesome to have a car that I can put my chair back and snooze.

I don’t mind the prospect of everyone having one as long as you can still have the option of having a traditional car. There is room for both.

I appreciate that you think that I’m “right about the potential fallout” of driverless cars. As you know, trillions of dollars flow downstream in car-related revenue. Given that, I hope that you’ll agree that it’s worthwhile to get “swept up in the what-ifs of driverless cars.” I think the biggest risk to the auto industry, as it is for incumbent market leaders in every industry facing disruptive technology, is to not get caught up in the what-ifs but, instead, assume that they know how the competitive dynamics will play out.

It’s true that every car company is working on driverless technology (and often using the same hardware components). But I believe that the magic is in the machine learning software, not the hardware components. Given its expertise in AI and software, Google is better positioned than most to tackle this problem. The fact that Google is attacking the problem in a holistic way, rather than assuming incrementalism and thinking about separate, incremental components to existing car designs, e.g. ATS, parking assistance, etc, might be a big advantage as well.

Another dangerous factor for car companies is how this messes with their existing business models—it might be incompatible. Sometimes it easier to pursue a new business model that is unrelated to the existing one, than one that cannibalizes the existing model.

For example, it might well be that Google’s badge is not be glued to the hood of self-driving cars, but what if it powers the driving system inside? IBM, Dell and the other PC makers suffered the consequences of ceding control points to their core component suppliers. It is not hard to imagine that “Google inside” might be worth more than owning the hood ornament. So, yes, Detroit is in a new era of collaboration with non-traditional partners. So was IBM when it surrendered its personal computing future to Microsoft and Intel.

All this said, I’ll give a spoiler to my series: the driverless car battle is the current car maker’s to lose, they have enormous advantages that they can leverage if they can get out of their way. But, even if car makers figure a way to win, Google can still profit enormously. I’ll look at the 3D chess match from both sides of the board in later parts of the series. I look forward to your continued feedback.

In sum, the driverless car provides Google with tremendous future business option value, all for less than what GM has spent on Super Bowl commercials over the last decade. That’s worth a lot of baloney! :-)